Keynes’s Gift to Posterity

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Count me as one who never knew, until this past weekend’s Niall Ferguson dust-up, that conservatives have long held John Maynard Keynes’s sexuality against him. I know, silly me; of course they did. And the nature of the protest is so typical of the conservative mind. The insistence on highlighting (usually inaccurately) one element of a person’s biography, and then arguing that this element represents the person’s full “character,” and then making the claim that said character is destiny; that’s how conservatives tend to see and explain the world, whether in limning their heroes (how Ronald Reagan “won” the Cold War) or in making sense of villains like Keynes.

Many commentators have by now risen to Keynes’s defense on a personal level and argued that his childlessness does not prove that he didn’t care about future generations. But surprisingly to me—especially as we concurrently debate the abysmal failures of austerity—no one that I’ve seen has defended Keynes against the larger historical charge and said the obvious: that in fact, Keynes-inspired policies as implemented in the United States and elsewhere have done immeasurable good for future generations, one hell of a lot more good than supply-side economics could ever even pretend to.

Let’s review the allegation, which Jonah Goldberg summarized over the weekend with the kind of bemused indifference that did not characterize his earlier iteration of the bill of particulars supporting his claim that John Kennedy was a fascist. Goldberg pronounced himself surprised that what Ferguson said was news to anyone. He then carries us on a brisk journey from Joseph Schumpeter (whose 1946 quote about Keynes has been oft-mentioned these last few days) to Gertrude Himmelfarb to William Rees-Mogg (see, even the Brits said it!) to Bill Greider (see, even a lefty said it!) to show that people have been saying this about Keynes for years, so what’s the big deal?

The big deal, of course, is that there are a lot of things you could say once that you can’t say now, and that’s mostly a good thing. Los Angeles Dodgers executive Al Campanis learned in 1987 to his surprise that you could no longer say on national television that black people lacked “some of the necessities” to be a manager or weren’t good swimmers because they “don’t have the buoyancy.” And high time it was. The same with Ferguson. Goldberg acknowledges this change, but he does so grudgingly. If you’re sitting around waiting for Goldberg, or as far as I can see nearly anyone on the right, to say Ferguson crossed a line, I’d advise you to throw in the towel.

The much bigger flaw in the conservative critique, though, has to do not with Keynes’s sexuality or the Bloomsbury Group’s libertinism, but with Keynes’s legacy in the realms of politics and economic policy. Keynes gave us the concept of counter-cyclical investment to get people to work. He believed in full employment. He supported policies that redistributed wealth to attempt to ensure a less inequitable society. The New Deal was Keynesian because the goal of the New Deal programs was to increase employment, or at the very least to increase the public’s buying power while unemployment remained high. Hence, for example, Social Security. Franklin Roosevelt may have been a somewhat faint-hearted Keynesian, returning to deficit-slashing in 1937, but he was Keynesian enough to follow the basic formula.

And has that formula not succeeded in giving several generations of older Americans, many of them born well after Keynes’s own death in 1946, lives of at least a minimum level of comfort and decency? And have not Medicare and Medicaid, the later children of the Keynesian New Deal, done the same? Of course they have. And they will continue to. We hope. Unless the people now disparaging Keynes get their hands on them.

And speaking of those people, let’s consider the long-term record of supply-side economics. We’ve had two presidents who practiced Arthur Laffer’s economic model, Reagan and George W. Bush. Reagan presided over a strong economy, true, and Bush a disastrous one. So the record is mixed on that point. But both built up massive deficits, more massive than any Keynesian. As Paul Krugman noted yesterday, only Reagan, Bush, and Bush Sr. left office with higher debt ratios than when they came in. And what has trickle-down economics done to advance general prosperity, to make future generations better off? If you’re in the top 1 percent, it’s done plenty. If you’re in the next 4 percent, a few things here and there around the edges. And if you’re in the other 95 percent, trickle-down economics has harmed you.

Laffer has sired a prodigious number of children, six of them. But there is no evidence in his economic policies that he’s given one thought to future generations. Well, scratch that: he probably cares a lot about future generations of people like him and his kids. But his economic policies have stolen from the middle class and the working poor, whose wages have not come close to keeping up with productivity (if they had kept up, the minimum wage today would be $22 an hour).

Meanwhile, the childless, effete Keynes, that consorter with lesbians and atheists and empire-destroying Lytton Strachey–types and who knows what else, laid the intellectual foundation for the policies that would give many generations of middle- and working-class people some peace of mind and dignity. The idea that he did nothing for posterity is a joke, and in the hands of the very people like Ferguson and Goldberg who would destroy the emoluments to ordinary people that flow in part from Keynes’s intellectual labors, I’d say it’s a pretty sick one.